So, I just bought the new (as of yesterday) iPod Touch.
It is basically a thinner iPhone minus the "Phone" and (worthless) camara part, plus 8GB.
I think that is ideal.
I was on some Mac blogs and many are complaining about the fact that the iPod Touch is 'only' 16 GB, so why would anyone want it. Well, I want it because that is 8GB MORE than the iPhone, for the exact same price (now), and it is sleeker, AND I don't have to deal with AT&T (I hated this service when it was Cingular and I refuse to go back), AND I don't have to pay a minimum of $55 a month for two years (which is $20 more than I pay currenly - which amounts to a waste of almost $500 over the contract) for no added value over my current phone service.
That sounds like a pretty substantial deal to me.
I think most of the compaliners on the Mac boards are those with currently large-capacity ipods. They don't want to downsize. But that isn't the part of the market the iTouch is for. If you want a music powerhouse, and you absolutely need 7,000 songs at your fingertips, buy/keep the big traditional iPod. I for one don't even personally like 7,000 different songs.
But then, that's just how my utility rolls.